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Dow Sinks 226 on Mortgage Market Worries
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[QUOTE]Originally posted by ohio_trader: [QB] [QUOTE]Originally posted by glassman: [qb] this mortgage meltdown should not have been such a surprise... we had FBI mortgage fraud investigations as front-page news in Memphis when i first moved to MS in '04..... the depth and breadth of it is the real surprise i guess... it appears they just bundled the mortgages all together without sorting out the risk factors... note the date on this one: [b]FBI warns of mortgage fraud 'epidemic' Seeks to head off 'next S&L crisis' From Terry Frieden CNN Washington Bureau Friday, September 17, 2004 Posted: 5:44 PM EDT (2144 GMT) WASHINGTON (CNN) -- Rampant fraud in the mortgage industry has increased so sharply that the FBI warned Friday of an "epidemic" of financial crimes which, if not curtailed, could become "the next S&L crisis." Assistant FBI Director Chris Swecker said the booming mortgage market, fueled by low interest rates and soaring home values, has attracted unscrupulous professionals and criminal groups whose fraudulent activities could cause multibillion-dollar losses to financial institutions. "It has the potential to be an epidemic," said Swecker, who heads the Criminal Division at FBI headquarters in Washington. "We think we can prevent a problem that could have as much impact as the S&L crisis," he said. In the 1980s, many Savings and Loans failed because of poor management, risky loans and investments, and in some cases, fraud. Taxpayers were left with a $132 billion tab to cover federal guarantees to S&L customers. The FBI has dispatched undercover teams across the country in an urgent investigation into dealings by suspect mortgage brokers, appraisers, short-term investors, and loan officers, Swecker, flanked by FBI executives and Justice Department prosecutors, revealed. In one operation, six individuals were arrested Thursday in Charlotte, charged with bank fraud for their roles in a multimillion-dollar mortgage fraud, officials said. The two-year investigation found fraudulent loans that exposed financial institutions and mortgage companies to $130 million in potential losses, they said. Also Thursday, federal agents in Jacksonville arrested two people and executed seven search warrants in connection with an alleged scheme designed to defraud banks of $22 million, officials said. The number of open FBI mortgage fraud investigations has increased more than five-fold in the past three years, from 102 probes in 2001 to 533 as of June 30 this year, the FBI said. The potential losses are staggering, and many financial institutions are cooperating with investigators. Officials noted mortgage industry sources have reported more than 12,000 cases of suspicious activity in the past nine months, three times the number reported in all of 2001. While the FBI described mortgage-related fraud as a nationwide problem, it said the levels of illegal activity are worse in some locations than in others. States identified as the top 10 "hot spots" for mortgage fraud are Georgia, South Carolina, Florida, Michigan, Illinois, Missouri, California, Nevada, Utah and Colorado. "It's bad in Georgia, the Atlanta area," said John Gillies, chief of the FBI's Financial Institutions Fraud Unit. "It was bad in the Charlotte area, but we've had a lot of undercover activity there that's helped push the problem into South Carolina."[/b] http://www.cnn.com/2004/LAW/09/17/mortgage.fraud/index.html i hope somebody investigates why the investigators failed to put a stop to it :D [/qb][/QUOTE]------------------------------------------------ further proof of its intention, meltdown of the middle class, this didn't happen per chance- and all will pay, even those with great credit and financially responsible, as more homes go into foreclosure all homeowners( values continue to go down) and renters(as rents also will go higher) will lose in detroit 1 out of every 33 homes is in foreclosure, this has a domino effect in the community that impacts both socio and economically that is devasting, especially to an area of the country that is very fragile to begin with ( ie detroit was rated the most dangerous to live in this past year)....what does that speak as people to allow this erosion and decay to take place and continue throughout this country, my deceased grandparents all born pre 1905 wouldn't believe what has happened in this country the last 25 years if they were still alive we have many great people, just few great leaders On this holiday be thankful for the many blessings, but also reflect on the times, and the poor fortunes of many in this country Happy Thanksgiving [/QB][/QUOTE]
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